## Silver Prices Skyrocketed 100%! How Should Taiwanese Investors Enter the Market? Silver ETFs: Options Available

In 2025, silver prices entered a historic bull market. Supported by multiple positive factors such as the Fed's rate cut expectations, tightening global supply chains, and silver being officially included in the US critical mineral list, London spot silver surged from the beginning of the year, breaking through $60 per ounce on December 9, and climbing further to a record high of **$64.6/oz**. To date, the annual increase in silver has exceeded **100%**, making it the best-performing asset class, far outpacing gold's approximately 60% rise and significantly surpassing the NASDAQ's 20% return.

In response to this surge, international investment banks like UBS( and even others have raised their 2026 target prices to the $58-60 range, openly acknowledging the possibility of reaching $65. Amidst this market atmosphere, many retail investors in Taiwan are starting to consider how to participate, and the question of **which silver ETFs** are suitable and which one fits their needs has become the most frequently asked.

## Comparing Three Ways to Invest in Silver: Why Choose Silver ETFs

Investors eager to benefit from rising silver prices face three options: directly holding physical silver bars, trading silver futures, or investing in silver ETFs.

**Problems with Physical Silver Bars:** While holding physical silver provides a sense of security, practical issues abound. Storage requires renting safes or paying professional vaulting fees (annual costs of 1-5%), and storing at home risks oxidation, theft, or damage. Buying and selling involve finding reputable silver shops or precious metals dealers, paying 5-6% spreads and commissions, and verifying authenticity. Liquidity is low, making quick liquidation difficult in urgent situations. Based on the 2025 surge of 100%, after deducting costs, the net return is approximately 95-100%.

**High-Risk, High-Reward Silver Futures:** Futures offer leverage, allowing small capital to control large positions, with both long and short options. If entered correctly in 2025, 2x leverage could theoretically yield over 200% gains. However, losses are similarly magnified, potentially wiping out the principal. Futures trading is complex, requiring monitoring contract expirations, rollover costs, and margin requirements, with higher transaction fees.

**Balanced Approach with Silver ETFs:** Compared to the above, silver ETFs combine the advantages of both and avoid major disadvantages. They do not require physical storage, are traded like stocks, and have much higher liquidity than physical silver. Compared to futures' high leverage risk, ETFs offer more controllable risk and are suitable for beginners and small investors to enter and exit the market quickly. In 2025, the net return of silver ETFs is slightly lower than the silver price (about 98-103%), but considering ease of operation and risk adjustment, they are the most practical choice for most investors.

## What Are Silver ETFs? How Do They Work? Explained Clearly

**The essence of silver ETFs** is an investment fund listed on stock exchanges that tracks the price movement of silver. Investors do not need to hold physical silver but can participate in the silver market by buying and selling fund units. Similar to stocks, they can trade anytime during market hours, enjoying high liquidity and trading convenience.

**Operational logic** varies depending on the ETF type. Some ETFs hold physical silver bars directly, ensuring their value tracks silver prices closely; others track silver prices through derivatives like silver futures or swap agreements. For example, if silver prices rise by 5%, the ETF's value usually increases by about 5%; if silver prices fall, the ETF's value declines accordingly.

This simple tracking mechanism allows investors to buy and sell flexibly like stocks while directly benefiting from capital gains due to silver price surges.

## What Silver ETFs Are Available? Analysis of 7 Popular Options

| Code | Name | Tracking Method | Fee Rate | Suitable For |
|-------|-------|-----------------|----------|--------------|
| SLV | iShares Silver Trust | Physical silver | 0.50% | Conservative long-term investors |
| DBS | Invesco DB Silver Fund | Futures | 0.75% | Seek pure silver price exposure |
| AGQ | ProShares Ultra Silver | Futures ) 2x leverage ( | 0.95% | Bullish traders with high risk tolerance (short-term) |
| ZSL | ProShares UltraShort Silver | Futures ) inverse 2x ( | 0.95% | Bearish on silver or hedging professionals |
| PSLV | Sprott Physical Silver Trust | Physical silver | 0.62% | Long-term investors wanting physical redemption options |
| SLVP | iShares MSCI Global Silver & Metals Miners | Mining stocks | 0.39% | High-risk takers seeking silver leverage effect |
| 00738U | TPEX Silver Futures | Futures | 1.00% | Local choice for Taiwanese investors |

**SLV - The Largest Silver ETF Globally:** Launched by Blackrock in 2006, with assets exceeding $30 billion. Its flagship advantage is **direct holding of physical silver**, with JPMorgan Chase as custodian. It adopts a passive management strategy, only periodically selling small amounts of silver to cover operational costs. Since 2014, it tracks the LBMA silver benchmark price. This pure physical holding structure makes SLV the most direct investment tool for silver prices, with minimal tracking error.

**DBS - Futures Tracking:** Launched by Invesco in 2008, it tracks silver prices via COMEX silver futures contracts. Compared to SLV's physical holdings, futures offer higher liquidity and transparency but involve rollover costs and basis risk. Suitable for investors seeking low-cost silver exposure.

**AGQ - Leverage Tool:** Launched by ProShares in 2008, providing **2x leverage**. If silver rises by 10%, AGQ theoretically rises by 20%. However, this leverage is only suitable for **short-term trading**, as compounding effects and long-term holding can cause tracking errors to widen, and actual returns may fall far short of expectations. Many investors suffer losses due to misunderstanding leverage decay.

**ZSL - Inverse Leverage:** Offers **-2x return**, meaning if silver drops 10%, ZSL rises 20%. It is mainly used for short-term trading or hedging. Like other leveraged products, it suffers from decay and is **not suitable for long-term holding**.

**PSLV - Physical Silver with Redemption:** Launched by Sprott in 2010, it is a **closed-end fund** rather than a traditional ETF. Unique in that investors can redeem units for physical silver, providing direct ownership. However, as a closed-end fund, its market price can trade at a premium or discount to NAV, which is a consideration for precise tracking. Assets under management are about $12 billion.

**SLVP - Mining Exposure:** Launched by Blackrock in 2012, it invests in global publicly listed companies engaged in silver exploration and mining, not silver itself. This amplifies silver price movements—when silver rises, mining stocks gain more. In 2025, it surged 142%, outperforming silver's 103% increase. The trade-off is higher volatility and exposure to company-specific risks, operational risks, policy changes, and costs. It often exhibits tracking errors and wider bid-ask spreads, requiring strong risk tolerance.

**TPEX Silver Futures (00738U) - Local Choice in Taiwan:** Launched in 2018, tracking the Dow Jones Silver Excess Return Index via COMEX futures. With a fee of 1%, it is a high-volatility product, and the most convenient among options accessible directly on Taiwan's stock trading platforms.

## Two Main Ways for Taiwanese Investors to Enter

) Method 1: Discretionary Trust (Best for Beginners)

Trade through domestic brokers( such as Fubon, Cathay, Yuanta, Yuanta, etc.) by instructing overseas brokers.

**Process:** Open a discretionary trust account (online or in person, prepare ID and bank info) → Choose TWD or foreign currency settlement → Use broker app or website to search for codes like SLV → Some brokers support regular fixed investments.

**Advantages:** Regulated by Taiwan's Financial Supervisory Commission, high fund safety; tax handling(e.g., US dividend withholding tax) is managed by the broker; funds stay within Taiwan, aligning with local investor habits.

**Disadvantages:** Higher transaction fees(about 0.2-0.3%); limited ETF options based on broker partnerships; currency conversion costs.

### Method 2: Opening Accounts Directly with Overseas Brokers (Lower Cost)

Skip intermediaries, open accounts directly on platforms like IB, Futu(, etc.).

**Process:** Prepare passport, ID, proof of address, bank info → Wire transfer TWD (set up designated account) → Trade via app or website → Handle tax and currency exchange independently.

**Advantages:** Very low fees, many brokers waive commissions or have fixed fee structures; access to a wide range of global ETFs; advanced tools like options, margin trading.

**Disadvantages:** Mostly English interfaces, learning curve for Chinese users; US withholding tax of 30% on dividends, requiring self-declaration for tax refunds; international fund transfers involve security and estate issues, with limited legal protection in Taiwan in case of disputes.

## Tax Considerations for Silver ETF Investment

**Taiwan-listed silver ETFs:** Treated like Taiwan stocks, easiest to operate. Buying is tax-free; selling incurs a 0.1% tax. TPEX Silver Futures (00738U) falls into this category.

**Overseas silver ETFs (e.g., US):** Profits are considered **overseas income** and must be declared. Thresholds: if total overseas income ≤ NT$1 million annually, no minimum tax applies; exceeding that, the excess is included in taxable income, with a NT$7.5 million exemption, and taxed at **20%** on the excess.

Since most silver ETFs are commodity-based and do not pay dividends, withholding tax in the US and Taiwan on dividends is minimal. The main tax burden comes from capital gains.

## Other Silver Investment Options: Silver CFDs

Besides ETFs, **silver CFDs** are also worth considering. CFDs( Contract for Difference) combine features of ETFs and futures: user-friendly trading interface like ETFs, leverage like futures, small capital requirements, and lower fees than futures. For those wanting to participate in silver market fluctuations without holding physical silver or dealing with complex futures operations, CFDs are a practical middle ground.

## Risks of Investing in Silver ETFs

Although silver ETFs offer convenient entry, risks must be acknowledged.

**Price Volatility Exceeds Expectations:** Silver's volatility is much higher than gold or stocks. While 2025 saw a 100% surge, history shows sharp corrections are common, and short-term losses can be significant. Investors need high risk tolerance and mental resilience.

**Tracking Errors Erode Returns:** Futures-based ETFs face rollover costs and basis risk, potentially resulting in returns below spot silver prices over the long term; physical ETFs have high accuracy but annual fees of 0.4-0.5% gradually eat into gains. Careful cost consideration is necessary.

**Exchange Rate and Geopolitical Risks:** Overseas ETFs involve USD fluctuations. Silver prices are also affected by geopolitical tensions, industrial demand shifts(solar energy, electronics manufacturing), and monetary policies, increasing unpredictability.

**Leverage Product Traps:** Products like AGQ and ZSL suffer from decay effects; long-term holding can cause tracking errors, and using short-term tools as long-term investments can lead to unexpected losses.

## Conclusion: How to Rationally Allocate Silver ETFs

Silver ETFs indeed provide Taiwanese investors with a convenient way to participate in the silver market. They avoid physical storage issues and are easier to operate than futures, with high liquidity and trading flexibility.

**Investment principles:** First, clarify your risk tolerance and investment horizon—short-term traders might consider leveraged ETFs but must understand decay risks; long-term investors should prioritize physically-backed products like SLV or PSLV with minimal tracking error; for small capital and to avoid currency and tax issues, discretionary trust or US ETFs are viable options.

Second, regularly review your allocation—silver is a non-yielding asset, relying solely on price appreciation. Regularly assess market conditions and fundamentals to avoid overexposure to short-term gains. Lastly, diversification remains key—do not concentrate too much capital in a single silver ETF or silver assets; instead, build a balanced portfolio with other asset classes.

Understanding the available options, their features, and risks is the first step toward rational participation in this wave of silver market enthusiasm.